Constitutional Amendment proposed for Mass millionaire tax

The coalition behind last year’s successful push to guarantee earned sick time for Massachusetts workers has taken the first step on Tuesday toward amending the state’s constitution to tax income over $1 million at a higher rate.

Raise Up Massachusetts, a coalition of organized labor, community groups and religious leaders, filed a petition on Tuesday with the Attorney General’s office seeking to impose an additional 4 percent income tax on all earnings above $1 million, with the revenue generated dedicated to the broad categories of public education, infrastructure and transit.

Because the new tax bracket would require an amendment to the state constitution, a document that prohibits tiered income taxes, the earliest the question could go before voters would be 2018. Many hurdles, however, remain before that could happen, including the Legislature voting to advance the petition in two consecutive constitutional conventions.

“Massachusetts has one of the largest income inequality problems in the country, and it’s getting worse. Yet out highest-income residents, who have been the biggest winners in the economy, pay the smallest share of their income in state and local taxes,” UMass Boston economics professor Arthur MacEwan said in a statement provided by the Raise Up coalition.

The 10 co-signers of the initial petition include a mix of wealthy businessmen such as former Stride Rite President Arnold Hiatt and small business owners such as Debbie Frongiero, who owns 7 Seas Whale Watch in Gloucester. Other petition signatories include Lawrence personal care attendant Islandia Aquino; Fall River teacher Rebecca Cusick; Christian Community Church pastor Rev. Jose Encarnacion of Worcester; former Northampton Mayor Clair Higgins; Marven-rhode Hyppolite, the former president of the Student Government Association at UMass Dartmouth; Peabody senior activist Barbara Mann; Bus Riders United organizer Sigute Meilus, of New Bedford; and Mary Ann Stewart, the parent representative on the Massachusetts Board of Elementary and Secondary Education.

The amendment would do away with the state’s flat income tax rate – currently set at 5.15 percent – replacing it with a tiered system. The current income tax rate, set to gradually fall to 5 percent, would remain in place for Massachusetts earners. An additional 4 percent tax would be levied on earnings over $1 million, or 9.15 percent under current tax structure.

The income level subject to the higher tax rate would be adjusted annually the same way cost-of-living adjustments are applied to federal tax brackets to “ensure that this additional tax continues to apply only to the commonwealth’s highest income residents.”

The first step in the process requires Attorney General Maura Healey and her office to review the language to make sure it meets the legal requirements for a ballot initiative. While the state constitution bans ballot questions that make specific appropriations of state funding, proponents believe the language directing new revenue to education and transportation is vague enough to clear the legal hurdles.

Attorney General Maura Healey told the News Service two weeks ago when the Raise Up coalition signaled their intention to file this amendment that she looked forward to learning more about it.

“We know the very real problem with income inequality in our country and how important it is to address issues of income inequality for families, not just in our state but across this country so I support efforts to address income inequality. I take that seriously as attorney general,” Healey said.

The process for amending the constitution, unlike more traditional ballot initiatives, takes years to move through a series of signature goals and required votes of the Legislature. If the language is approved by Healey, petitioners must collect 67,750 signatures by November to send the question to the Legislature.

Twenty-five percent of a joint meeting of the House and Senate, or 50 votes, must then support the measure before the end of formal sessions on July 31, 2016. A second affirmative vote of 50 or more lawmakers would be required the following session ending July 31, 2018 in order for the question to appear on the 2018 ballot.

While constitutional amendments to impose a graduated income tax have failed at the ballot box in the past and in recent years have failed to generate much real debate on Beacon Hill, the climate may have changed slightly with Senate President Stanley Rosenberg assuming control of that branch.

“I’m a big supporter of graduated income tax,” Rosenberg recently told the News Service. “I haven’t studied this particular proposal, but I understand they’ve done a lot of hard work and a lot of thinking about why it failed and how it failed in previous attempts and sort to address the concerns of voters as they understood them from previous efforts.”

Rosenberg, in his capacity as president, now wields the gavel during the Constitutional Convention, a joint session of the House and Senate where amendments such as this one can be, but are not always, debated.

“I would love to see the Convention debate the issue. I think it fits into the broad theme of income inequality and insecurity in Massachusetts,” Rosenberg said.